New Delhi, July 12 (IANS) India’s factory output was up 11.5 percent in May, powered by a 12.3 percent expansion registered by the manufacturing sector, giving the central bank the much-needed comfort level to look at hiking key rates upward to tame inflation.
Data on the country’s index for industrial production (IIP) released here Monday by the commerce and industry ministry showed that while mining sector grew by 8.7 percent that of power generation expanded by 6.4 percent.
Cumulatively, the general index has risen 10.14 percent during the first two months of this fiscal, while that for manufacturing was 15.1 percent. Mining and electricity indices expanded by 10.2 percent and 6.6 percent, respectively.
The fresh data comes against the backdrop of the Reserve Bank of India (RBI) hiking its short term lending rates for banks by 25 basis points earlier this month to suck excess liquidity out of the system, ahead of the monetary policy review July 27.
This was the third time this year that the apex bank hikes its rates since it decided to tighten its monetary policy – first on Jan 29, followed by another one on March 19.